Tag: Bank

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HSBC Reports Strong Q1 2025 Results Amid Economic Uncertainty with a 317% increase in pre-tax profit

HSBC

HSBC, Europe’s largest lender, has posted better-than-expected results for the first quarter of 2025, demonstrating resilience despite global economic challenges.

The bank reported a pre-tax profit of $9.48 billion, surpassing analyst estimates of $7.83 billion. Revenue for the quarter stood at $17.65 billion, reflecting a 15% decline compared to the previous year.

HSBC’s pre-tax profit for Q1 2025 was $9.48 billion, which represents a 25% decline compared to the same quarter last year when it reported $12.65 billion.

However, compared to the previous quarter, pre-tax profit surged by nearly 317%.

A key highlight of HSBC’s earnings announcement was its $3 billion share buyback program, which the bank intends to complete before its interim results later this year.

This move signals confidence in its financial position and commitment to returning value to shareholders.

Despite the strong performance, HSBC warned of heightened macroeconomic uncertainty, citing protectionist trade policies as a factor negatively impacting consumer and business sentiment.

However, the bank remains optimistic about its restructuring efforts, which are expected to drive cost savings and operational efficiency.

HSBC’s wealth business and corporate banking segments were standout performers, contributing significantly to its earnings growth.

CEO Georges Elhedery emphasised the bank’s strategic discipline and ability to navigate market volatility.

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British Fintech Revolut Surpasses $1 Billion in Profit – Eyes UK Banking Expansion

Revolut banking revolution

British fintech giant Revolut has achieved a major financial milestone, reporting £1.1 billion ($1.5 billion) in net profit for 2024, marking a 149% increase from the previous year.

The company’s revenue also saw significant growth, surging 72% to £3.1 billion, driven by a combination of subscription services, wealth management, and interest income.

One of the standout contributors to this success was Revolut’s wealth unit, which includes stock trading, boasting a 298% jump in revenue. The firm’s loan book also expanded 86% to £979 million, further strengthening its financial position.

This growth comes at a pivotal moment for Revolut, as it prepares to launch its UK bank later this year after securing a banking licence in 2024.

Once fully operational, the bank will enable Revolut to offer traditional financial services, including loans, overdrafts, and mortgages, enhancing its appeal as a primary banking option.

Revolut’s UK CEO has emphasised that securing full banking authorisation is a crucial step toward global expansion and an eventual IPO.

As the company continues to evolve, it faces stiff competition from established players such as Monzo and Starling, both of whom secured banking licences years earlier.

Revolut’s remarkable financial performance signals its ambitions to become a dominant force in banking – a fintech powerhouse redefining modern finance.

About Revolut

Revolut is a British fintech company that provides digital banking services, including currency exchange, stock trading, cryptocurrency transactions, and personal finance management.

The name ‘Revolut’ suggests a revolution in financial services, aiming to simplify and modernise banking through technology.

Founded in 2015 by Nikolay Storonsky and Vlad Yatsenko, Revolut started as a platform offering fee-free foreign exchange and has since expanded into a global financial super app.

It operates in multiple countries and serves millions of customers, offering both free and subscription-based banking services.

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Barclays third quarter profit jumps 23% as shares hit nine-year high!

On Thursday 24th October 2024, Barclays Bank announced a net profit of £1.6 billion ($2 billion) for the third quarter, surpassing expectations

This figure exceeded the anticipated £1.17 billion net profit from analysts and marked a 23% increase from the same quarter in 2023.

The revenue for the quarter was reported at £6.5 billion, just over the predicted £6.39 billion.

Shares of Barclays rose by 3.5% as of 08:45 BST – hitting their highest point since October 2015 according to reports.

Barclays Bank One year share chart

Barclays Bank One year share chart

The bank’s return on tangible equity improved to 12.3% from the previous quarter’s 9.9%, while its CET1 ratio, a key solvency metric, increased to 13.8% from 13.6%.

Barclays had earlier this year unveiled a strategic revamp aimed at reducing expenses (cost cutting), enhancing returns for shareholders, and securing long-term financial stability.

This shift has emphasized domestic lending and scaled back the investment banking division’s costs. Part of this new strategy involved acquiring the retail banking operations of Tesco Bank in the UK.

Common Equity Tier 1 (CET1)?

Common Equity Tier 1 (CET1) is a key element of Tier 1 capital, consisting mainly of common stock held by banks or other financial institutions. Introduced in 2014, CET1 serves as a capital measure designed to safeguard the economy from financial crises. Banks must adhere to the minimum CET1 ratio requirements relative to their risk-weighted assets (RWAs), as specified by their financial regulators.

History lesson

Barclays Bank was formally established on November 17, 1690. It traces back to goldsmith bankers John Freame and Thomas Gould in London.


The name ‘Barclays’ came into the business in 1736 when James Barclay, who married John Freame’s daughter, joined the partnership.

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Euro zone inflation falls to 1.8% in September 2024 below the ECB target of 2%

In September 2024, inflation in the Euro zone fell to 1.8%, falling below the European Central Bank’s target of 2%, according to early data from Eurostat released on Tuesday 1st October 2024

Excluding the more volatile prices of energy, food, alcohol, and tobacco, the core inflation rate stood at 2.7%, marginally below the anticipated forecasts.

This inflation figure matched the predictions of economists.

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Not so FINE at HSBC – £57.4m fine for depositor protection system failings

Bank system failings.

HSBC fined £57.4m by the Bank of England for ‘serious failings’ to protect customer deposits.

The bank failed to accurately identify deposits eligible for the UK’s Financial Services Compensation Scheme, the Bank’s Prudential Regulation Authority (PRA) announced.

HSBC was fined by the Bank of England’s Prudential Regulation Authority (PRA) for failing to properly implement the depositor protection rules, which are meant to safeguard customer deposits in case of a bank collapse. 

Serious concerns

The PRA said the failings were ‘serious‘ and ‘materially undermined the firm’s readiness for resolution’. HSBC reportedly said it was pleased to have resolved the ‘historic matter’ and cooperated with the investigation. The ‘failings’ occurred between 2015 and 2022. The fine is the second highest to date imposed by the regulator.

Protected up to £85,000 per person per institution

Under the scheme, customer deposits are protected up to the value of £85,000.

Under depositor protection rules, banks must have systems and controls in place to make sure that financial information is logged correctly. This information is needed if the FSCS has to make payments to customers upon a bank collapse.

However, the PRA said HSBC Bank incorrectly marked 99% of its eligible beneficiary deposits as ‘ineligible’ for FSCS protection.

Unfortunately this episode doesn’t give me much faith in the banking system that is supposed to protect the ‘saver’. At least the PRA discovered the failings.

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HSBC down online banking outages

Bank online outage

It is widely reported that HSBC‘s online banking system is experiencing some problems today, 24th November 2023. 

According to the news reports, many customers are unable to access the app or the website or make payments. 

The bank has acknowledged the issue and said it is working hard to fix it as soon as possible. Some users have also reported missing money from their accounts.

Downdetector, which tracks websites, showed more than 4000 people reported they could not access HSBC services.

‘It is impacting HSBC UK customers only – there is no impact to First Direct or M&S Bank customers’, a spokesperson for the bank said.

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U.S. bank boss warns world facing ‘most dangerous time in decades.’

Crystal ball gazing

The world may be facing ‘the most dangerous time… in decades’, bank boss Jamie Dimon has reportedly warned.

The chief executive of JP Morgan Chase told investors recently that he was concerned about the risks to the economy from rising geo-political tensions. He said wars in Ukraine and Israel could hit energy and food prices, and global trade.

Thousands have been killed in Israel and Gaza after an unprecedented attack by Palestinian militant group Hamas. Mr Dimon, who leads America’s biggest bank, was speaking as the firm revealed its latest quarterly results.

Banking the profits from higher interest rates

The bank reported $13 billion (£10.7 billion) in profit over the three months to September 2023, up 35% from the same period in 2022.

Dimon said the bank had benefited from U.S. households and business in healthy financial shape but warned that he remained cautious about the state of the global economy, given the many risks emerging. What about the effect of interest rate increases on profits the bank has benefitted from too?

‘My caution is that we are facing so many uncertainties out there,‘ he reportedly said. So helpful Mr. Dimon. He told investors they should be prepared to face higher interest rates, persistent inflation, as well as fallout from the violent conflicts.

How perceptive?

I wouldn’t necessarily call his comments very intuitive – interest, inflation and conflict is there for all to see.

Shame he didn’t use his super magical powers of detection to get ahead of the inflation problem earlier.

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ATM cash deposits go missing at NatWest

ATM

NatWest customers reported money missing from their accounts after making a cash deposit. The bank has said an issue with its cash deposit machines has been now resolved

Customers shared their concerns on social media on Thursday 21st September 2023 that recently-deposited cash was not showing up in their account balance.

Early on Friday 22nd September 2023, NatWest said the issue had been resolved and that no-one would be left out of pocket.

Some customers had reported going overdrawn because of the issue and expressed concern they would be charged fees.

In a statement, NatWest said, ‘Cash payments to a small number of accounts have been delayed and the issue is now resolved and customer accounts are being updated’.

It is unclear how many people were affected by the issue.

It is also unclear why this happened.

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UK house prices experience biggest yearly decline since 2009

UK House Prices Fall

The Nationwide Building Society says house prices are 5.3% lower compared to August last year, in the biggest annual decline since 2009.

Nationwide said the drop represented a fall of £14,600 on a typical home in the UK since house prices peaked in August 2022. It also said higher borrowing costs for buyers had led to a slowdown in activity in the housing market. Mortgage approvals are also about 20% below pre-Covid levels.

After 14 rate increases from the Bank of England – a two year fixed rate mortgage is now touching 6.7%

Since December 2021, the Bank of England (BoE) has raised interest rates 14 times in row in a bid to clamp down on rising inflation in the UK. The bank’s base rate now stands at 5.25%. This has led to lenders raising their mortgage rates, putting increased pressure on homebuyers.

The average two-year fixed mortgage rate on Friday was 6.7%, while the average five-year fix was 6.19%.

Average house prices in the UK peaked at £273,751 in August 2022 but fell to £259,153 last month.

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Bank error in your favour…?

Bank error

A technical issue that affected the Bank of Ireland’s online banking services allowed some customers to withdraw or transfer more money than they had in their accounts.

The glitch reportedly also added €1,000 to some accounts without explanation. This led to large crowds forming at ATMs across the country, hoping to take advantage of the error.

Some reports suggest that the police were called to calm some situations as some ATMs ran out of cash. The bank has since fixed the problem and warned customers that any excess money they withdrew or transferred will be debited from their accounts.

The bank also apologized for the disruption and urged customers who may face financial difficulties due to overdrawing on their accounts to contact them.

Questions remain – how or even why did this happen?

Bank error
‘Bank error allowed people to withdraw money from their accounts they didn’t have’.
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Bad Bank Practice

Central banker

Chancellor Jeremy Hunt has asked the City watchdog to speed up a probe into whether people have had bank accounts closed due to their political views

It follows a row over the closure of former UKIP leader Nigel Farage’s Coutts account.

Mr Hunt requested the Financial Conduct Authority (FCA) to ‘urgently investigate how widespread this practice is, and put a stop to it’. The FCA reportedly said Mr Hunt’s request is ‘in line with our plans‘.

It comes after Mr Farage obtained a report from Coutts which indicated his political views were considered as a factor in his account closure. Mr Farage had his account re-instated and has launched a campaign against account closures which has received support from government ministers.

Express or suppress?

The FCA is already preparing to look into this, and banks also face government reforms over account closures. Mr Hunt reportedly said: ‘You can agree or disagree with Nigel Farage but everyone wants to be able to express their opinions’.

‘In today’s society, you need a bank account function and so a threat to be de-banked is a threat to your right to express your opinions‘.

Mr Hunt expressed the FCA has the power to fine banks ‘very large sums of money if they find this practice widespread’.